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The streaming wars are over: Morning Brief

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Bob Iger is just like you and me — he watches a lot of Netflix (NFLX). But now, the Disney CEO is talking about it.

"Netflix is, in many respects, the gold standard when it comes to streaming," Iger said during the company's quarterly earnings call on May 7.

And he's not the only big-shot media exec praising rival platforms either.

"Disney itself is a fabulous company," Warner Bros. Discovery (WBD) CEO David Zaslav piped in on Thursday.

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Amazon received compliments too, as WBD streaming chief JB Perrette said: "Obviously, Amazon and Netflix are both incredibly compelling."

Those quotes, ripped from the call transcripts of competing media companies this earnings season, make one thing abundantly clear: The streaming giants have called a truce.

It's no accident that this "kumbaya" moment is arriving now. The rules of the game had already been changing. Once upon a time, all Wall Street rewarded was subscriber growth as numerous platforms flooded the market. Profitability? Who cared. Free cash flow? Never heard of her.

The goal was to attract as many users as possible. That led to an era of overspending as platforms raced to lure top producers and secure the most sought-after shows.

At the time, Netflix (NFLX) was the ringleader. The platform secured famed producer Ryan Murphy with a high-profile $300 million contract in 2018. "Bridgerton" creator Shonda Rhimes also signed with the company around that time, locking in a reported $100 million deal.

Others soon followed. In 2019, Warner Bros. Discovery (then known as WarnerMedia) reportedly coughed up more than $1 billion for the streaming rights to "The Big Bang Theory." Comcast's NBCUniversal (CMCSA) shelled out $500 million for "The Office" streaming rights that same year. Even Big Tech was all in, with Apple (AAPL) sinking $6 billion into the launch of Apple TV+, which only offered nine original series at the time.

LOS ANGELES, CA - APRIL 18:  Netflix Chief Content Officer Ted Sarandos (L) and Walt Disney Company CEO Bob Iger attend the LACMA 50th Anniversary Gala sponsored by Christie's at LACMA on April 18, 2015 in Los Angeles, California.  (Photo by Charley Gallay/Getty Images for LACMA)
LOS ANGELES, CA - APRIL 18: Netflix Chief Content Officer Ted Sarandos (L) and Walt Disney Company CEO Bob Iger attend the LACMA 50th Anniversary Gala sponsored by Christie's at LACMA on April 18, 2015 in Los Angeles, California. (Photo by Charley Gallay/Getty Images for LACMA) (Charley Gallay via Getty Images)

Then Wall Street started to change its tune. Could streaming — an incredibly cheap way for consumers to access their favorite content at the touch of a button — become an actual business? Investors weren't so sure. The industry scrambled to prove them wrong.

There were price hikes and password-sharing crackdowns. Ad-supported tiers and mass layoffs. That helped with streaming profitability across the board, although the majority of companies (minus Netflix and WBD) still don't make money in those divisions.

Recently, partnerships and bundled offerings among competing media companies have become more of a trend in an effort to combat not only profitability challenges but also a more fickle consumer.

Last week, Disney (DIS) and Warner Bros. Discovery announced a new bundle that will bring together Disney+, Hulu, and Max streaming services.

Earlier this year, Warner Bros. announced a sports streaming partnership with Disney's ESPN and Fox (FOXA), set to debut later this fall. In December, WBD partnered with Netflix on a $10 ad-supported bundle offered through Verizon (VZ).

The competitors' embrace signals a clear shift for the industry as consolidation lurks around the corner with Paramount currently seeking a buyout while WBD has also been at the center of M&A talks after its two-year post-merger lockup period officially ended.

As David Zaslav put it last week, "There's more strength together." We'll find out soon if that's the case.

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Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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